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Proposed health-insurance cuts for public employees reversed

Friedman had filed legislation; Garballey weighed in

Cindy FriedmanFriedman

UPDATED, Feb. 2: The state agency that controls health benefits for public employees and their families, including those in Arlington, on Thursday, Feb. 1, voted to reverse its controversial decision to limit health-plan options.

The Group Insurance Commission (GIC) came under attack soon after its Jan. 18 decision, in an 8-5 vote, to eliminate popular commercial health plans from Harvard Pilgrim Health Care, Tufts Health Plan and Fallon Health. Among those objecting were state Sen. Cindy Friedman and state Rep. Sean Garballey.

The change would have forced about 200,000 state and local employees and their families to move to coverage under three lesser-known health insurers. Read the report >> 

In a reversal, the GIC decided Jan. 25, to rethink the matter, the Globe reported. The change of heart came after the Globe reported that Attorney General Healey was investigating the GIC violated the state meeting law

Garballey, Democrat of Arlington and West Medford, said he has also supported those asking that the GIC reverse course. He told YourArlington that he has asked for specific cost-saving numbers and is awaiting a response.

CommonWealth magazine reported the GIC addressed "an ambitious proposal to save an estimated $21 million by paring back the number of health insurance carriers available to its 430,000 state and municipal customers and opted instead for a status quo approach that will save just $1 million." 

The Senate Ways and Means Committee along with the Senate chair of the Joint Committee on Public Service and the Senate chair of the Joint Committee on Health Care Financing held an oversight hearing to review the GIC health-plan changes Jan. 31. A report by CommonWealth magazine says Roberta Herman, head of the GIC, accepted blame for the issue. The report says Sen. Cindy Friedman noted the process caused lasting damage and quotes her: "I'm looking for how we can put trust back in the system."

In a Jan. 26 news release, Friedman responded: "As you may have heard, we received some promising news yesterday morning. The GIC announced that, at its scheduled February 1st meeting, it plans to make a motion to reconsider its decision to narrow health-care carriers. If the motion passes, a second vote will be taken to accept the full list of original health-care carriers, including Harvard Pilgrim Health Care, Tufts Health Plan and Fallon Health.

"I'm very pleased to hear this news and strongly urge the GIC to vote for reconsideration.

Thanks all who contacted her office

"Thank you to everyone who contacted my office or contacted the GIC directly to voice your concerns about this issue. Without your phone calls, emails and personal visits, the GIC would not have reversed its course and chosen to reconsider its original decision. This is, once again, clear evidence that your voice matters. I am grateful for your commitment to staying engaged on this issue, and many others issues that affect so many of us.

"Regardless of the GIC's decision to reconsider, my colleagues and I will continue to encourage the GIC to make more transparent and inclusive decisions to ensure health-care coverage will remain available and continuous for the thousands of GIC state employees, retirees and their dependents."

In a Jan. 23 statement, Friedman expressed outrage and suggests she could file legislation to address this issue, and now she has, requiring notice be given to legislators any time the GIC makes significant changes to government health plans, reports the State House News Service.

Behind the proposed legislation

Her office said the act to ensure greater transparency at the GIC (SD.2500) aims to require the GIC to refrain from executing an agreement or contract for insurance coverage or a health plan until 90 days after notice has been provided to the Legislature. This 90-day window will ensure the public has an adequate opportunity to provide input, as well as enable the Legislature to seek detailed information from the GIC regarding why and how the decision was made and the specific ramifications the decision may have on individual health plans.

Under changes announced without warning last week, GIC participants and their families face limited choices of carriers, a change that would affect more than 200,000 employees, retirees and their dependents statewide.

"I've already begun to hear from concerned families in my district who fear that they will be forced on to a new plan that may or may not allow them to keep their current doctors or continue the course of treatment that they are currently on.

"In addition, the decision will have a real impact on those insurers -- all of whom are Massachusetts companies -- and their employees who have been dropped as a result of this abrupt decision that took everyone by surprise.

"A big winner in this decision is Unicare, a for-profit insurance company based in Indiana. As you can imagine, I am outraged by the lack of transparency by the GIC in making this decision and the complete lack of notice in providing specific details of the changes to those that will be highly affected by this change."

Already expensive -- what next?

The statement provided this background:

"In a state where health insurance is already expensive and, for some, difficult to access, we must make every effort to be transparent, careful and inclusive about the decisions we make. Upending over 54 percent of GIC members and their dependents without notice or concrete assurance that their health care, one of the most important aspects of their lives, will remain available and continuous is both unfair and troubling.

Friedman cited a further issue: "... [W]hat is truly driving up health-care costs for the GIC are rising prescription drug costs. If this is true, then why are we choosing to once again burden the consumer rather than standing up against the pharmaceutical companies and addressing rising drug costs?

"As state senator, I will advocate for everyone throughout the 4th Middlesex and the Commonwealth who will be impacted by this change. In the days and weeks ahead, I plan to discuss this matter further with my colleagues and possibly file legislation to address this issue."

Hearing on GIC plan changes, CommonWealth report

As to the Jan. 31 hearing, Friedman wrote in a Jan. 24 newsletter: "As the Senate vice chair of the Joint Committee on Public Service, I will join the chairs of the other committees in presiding over the hearing. The hearing will be held in Gardner Auditorium at the State House. Additionally, there will be a series of public hearings held by the GIC to weigh public opinion about the changes. The schedule for the GIC's public hearings can be found here >> 

"Thank you to everyone who has contacted me about this issue over the past few days. I know that this sudden change may have caused great frustration to you and your families and I'm eager to find a solution to this problem so that no one in our district and the Commonwealth has to worry about their preferred health-care options."

Meanwhile, an online report in CommonWealth magazine says the GIC’s decision to cut back on the number of health-plan options available to public employees and retirees may have stirred up a hornet’s nest of opposition, but the GIC’s goal, which wasn’t explained well, was ultimately aimed at saving millions of dollars a year in administrative costs, reports CommonWealth’s Bruce Mohl, who obtained a slide presentation to board members prior to its controversial vote earlier this month. 

Unions, hospitals react

The Globe's initial staff report about this issue focused on public-employee unions. "Several union representatives slammed Thursday's vote by the Group Insurance Commission, an obscure but critical state agency, and what they called a lack of transparency leading up to the decision. They said they learned of the planned vote the night before it happened — or, in many cases, not until after the fact.

The Globe followed up with the impact on hospitals: "The state agency that spends more than $2 billion a year to provide health coverage to 436,000 public employees, retirees, and their families is pushing changes that would allow it to slash what it pays the most expensive hospitals, a drastic move to try to rein in health-care costs."

The GIC voted to support capping its payments to health-care providers at 160 percent of the rates paid by Medicare, the federal government’s insurance program for seniors, The Globe reported. The change is supposed to save the state $20.8 million next year, officials said.

The impact on those with Tufts Health Plan would not affect Medicare retirees, Friedman's statement said.

After resisting participating in the GIC in 2009 and 2010, Arlington public-employee unions joined in 2011 -- a factor that has supported town finances and forestalled need for an override following the one in 2011.

Globe, Jan. 24, 2018: Baker calls rollout of health insurance changes for state workers 'flawed'
Boston Globe, Jan. 24, 2018: Agency that spends $2b a year wants to cap payments to hospitals
MassLive, Jan. 23: Change to state workers' health insurance plans was 'seriously mishandled,' Healey says
Boston Globe, Jan. 23, 2018: Public employee unions cry foul after state cuts health insurance options 

This news summary was published Tuesday, Jan. 23, 2018, and updated numerous times, including Feb. 2, to add link to CommonWealth report.

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